Flashback on ECJ Cases – C-307/01 (d’Ambrumenil and Dispute Resolution Services) – Regular medical checks by employers and insurers are VAT exempted

On November 20, 2003, the ECJ issued its decision in the case C-307/01 (d’Ambrumenil and Dispute Resolution Services).

Context: Sixth VAT Directive – Exemption for medical care provided in the exercise of the medical and paramedical professions

Article in the EU VAT Directive

Article 13A(1)(c) of the Sixth VAT Directive (Article 132(1)(c) of the EU VAT Directive 2006/112/EC)

Article 132(1)(c) (Exemption)

1. Member States shall exempt the following transactions:
(c) the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned;

Facts

The first appellant in the main proceedings, Dr d’Ambrumenil, qualified in medicine in 1975. After having worked for the National Health Service as a general practitioner from 1978 to 1987, he established himself in private practice and continued to practise medicine in his private consulting rooms. In the course of his professional activities, Dr d’Ambrumenil has acted as an expert medical witness before various courts and given evidence in a large number of cases concerning, particularly, medical negligence, personal injury and disciplinary proceedings. He also acts as a professional arbitrator and mediator.
The second appellant in the main proceedings, DRS, is a company formed by Dr d’Ambrumenil in 1994. A substantial part of Dr d’Ambrumenil’s professional activities have been carried on by DRS since 1997 when he ceased to practise medicine privately. The activities mentioned consist of the supply of services which require expertise which is both legal and medical, in particular arbitration and mediation services.
By decision notified to Dr d’Ambrumenil on 29 September 1997, the Commissioners of Customs and Excise concluded that several services provided either jointly by the two appellants in the main proceedings, or by one of them, fell within the scope of item 1 in Group 7 in Schedule 9 to the VATA 1994 and were therefore exempt from VAT.
Dr d’Ambrumenil appealed against that decision to the VAT and Duties Tribunal, London, which ordered DRS to be joined as party to the proceedings. By a preliminary decision given on 16 March 1999, the Tribunal proposed referring to the Court of Justice for a preliminary ruling a question on the interpretation to be given to the exemption provided for by Article 13A(1)(c) of the Sixth Directive in the light of the arguments which had been presented to it by the parties. The reference to the Court of that question was subsequently stayed pending the judgment in D. v W., cited above.
According to the order for reference, and in particular from the preliminary decision attached thereto, the parties to the main proceedings agree that certain supplies of services by Dr d’Ambrumenil, in his own name or on behalf of DRS, are subject to VAT. However, in relation to other services provided by them, the appellants in the main proceedings dispute the view of the Commissioners of Customs and Excise which classifies those services as provision of medical care within the meaning of Article 13A(1)(c) of the Sixth Directive. According to the appellants, such services, even though they involve medical knowledge and experience, are not covered by the exemption under that provision, which concerns only medical interventions in order to diagnose, treat and, if possible, cure an illness or health problem.
In its preliminary decision, the VAT and Duties Tribunal expressed an opinion favourable to the position taken by the Commissioners of Customs and Excise, according to which the services at issue in the main proceedings are exempt services under Article 13A(1)(c) of the Sixth Directive. None the less, it considered that, in spite of the clarification supplied by the judgment in D. v W. as to whether VAT was payable on the services of a doctor who carries out a paternity test and makes a report thereon, the Court’s interpretation was still required in order to decide on the tax treatment of the services referred to in the main proceedings.

Questions

Is Article 13A(1)(c) of [the Sixth Directive] to be interpreted as covering the following activities when performed in the exercise of the medical profession as defined by the Member State:

(a) conducting medical examinations of individuals for employers or insurance companies,

(b) the taking of blood or other bodily samples to test for the presence of viruses, infections or other diseases on behalf of employers or insurers,

(d) giving certificates as to a person’s medical condition for purposes such as entitlement to a war pension,

(e) medical examinations conducted with a view to the preparation of expert medical reports regarding issues of liability and the quantification of damages for individuals contemplating personal injury litigation,

(f) the preparation of medical reports

(i) following the examinations referred to in (e) and

(ii) based on medical notes without conducting a medical examination,

(g) medical examinations conducted with a view to the preparation of expert medical reports regarding professional medical negligence for individuals contemplating litigation, and

(h) the preparation of medical reports

(i) following the examinations referred to in (g) and

(ii) based on medical notes without conducting a medical examination?

AG Opinion

(1) Article 13A(1)(c) of the Sixth Directive is to be interpreted as meaning that

– conducting medical examinations of individuals, and

– taking blood or other bodily samples to test for the presence of viruses, infections or other diseases,

for or on behalf of an employer or insurance company are not exempt from VAT if they do not have any therapeutic aim, such as the medical treatment of the individuals by means of prevention, diagnosis or treatment, but serve some other purpose, such as the compilation of health-related information by an expert for employers or insurance companies.

(2) The aim of medical activities such as

– certification of medical fitness such as, for example, fitness to travel,

– giving certificates as to a person’s medical condition for purposes such as entitlement to a war pension,

– preparing medical reports following medical examinations, including conducting such medical examinations, or on the basis of medical notes without any medical examination being carried out, in connection with issues of liability and the quantification of damages for individuals contemplating personal injury litigation, and

– preparing medical reports on the basis of medical notes or following medical examinations, including conducting such examinations, in connection with medical negligence for individuals contemplating litigation

is the obtaining of an expert opinion, rather than therapeutic. They do not therefore fall within the scope of Article 13A(1)(c) of the Sixth Directive and are thus not exempted from VAT.

Source Curia

Decision

1. Article 13A(1)(c) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment, is to be interpreted as meaning that the exemption from VAT under that provision applies to medical services consisting of:

– conducting medical examinations of individuals for employers or insurance companies,

– the taking of blood or other bodily samples to test for the presence of viruses, infections or other diseases on behalf of employers or insurers, or

– certification of medical fitness, for example, as to fitness to travel,

where those services are intended principally to protect the health of the person concerned.

2. The said exemption does not apply to the following services, performed in the exercise of the medical profession:

– giving certificates as to a person’s medical condition for purposes such as entitlement to a war pension,

– medical examinations conducted with a view to the preparation of an expert medical report regarding issues of liability and the quantification of damages for individuals contemplating personal injury litigation,

– the preparation of medical reports following examinations referred to in the previous indent and medical reports based on medical notes without conducting a medical examination,

– medical examinations conducted with a view to the preparation of expert medical reports regarding professional medical negligence for individuals contemplating litigation,

– the preparation of medical reports following examinations referred to in the previous indent and medical reports based on medical notes without conducting a medical examination.

Summary

Source